That’s partially due to the sell off that pushed mortgage rates up to their highest levels in two months last week. This dramatic increase was largely fueled by rising U.S. Treasury yield and the sustained market volatility stemming from President Donald Trump’s tariff policies. It’s no wonder that the average rate on a typical 30-year fixed mortgage skyrocketed to 6.83% for the week ending April 17. That’s up from 6.62% just a week ago. That’s the biggest seven-day increase in mortgage rates seen since last November, according to Freddie Mac’s weekly survey.
Last Wednesday, the U.S. 10-year Treasury yield jumped to 4.5%. This particular yield sets a benchmark for long-term mortgage rates. Heightened volatility in the financial markets has driven this increase. It’s the escalating trade war with China that’s getting them all riled up. NPR spoke to two analysts last week who were watching a big sell-off of U.S. bonds. They credited this move solely to the unknowns created by the tariffs and what they might do to the economy.
Sam Khater, Freddie Mac’s chief economist, cautioned that it is too early to say that a trend has definitively formed. He pointed out that mortgage rates have been on a consistent decline since March. With a new upward spike in Treasury yields, that has all changed and the mortgage landscape is different. Specifically, as of Thursday, the U.S. 10-year Treasury yield closed at about 4.3%. While that’s a little less than the recent high, it’s still having a huge impact on mortgage rates.
While there was a slight uptick with this recent increase, mortgage rates are still comfortably under the 7% cutoff rate that characterized this time last year. The back and forth is telling. They provide critical signals of overall macroeconomic conditions and investor expectations of future monetary policy trajectory and international trade relationship.
Freddie Mac releases data on mortgage rates weekly, and the organization plays a crucial role in providing insights into the housing finance market. What we haven’t discussed is that it’s borrowers who are experiencing much higher costs, at present. They are still benefiting from rates that have yet to return to last year’s peaks.